Written Ministerial Statements
Monday 11 June 2012
Business, Innovation and Skills
Higher Education Update
On 28 June 2011, the Government published a higher education White Paper, “Students at the Heart of the System”. This was followed on 4 August 2011 by a technical consultation, “A new fit-for-purpose Regulatory Framework for the Higher Education Sector”. Over 200 responses to the White Paper were received, and over 150 responses to the technical consultation.
We are today publishing the Government response to both consultations. This provides a summary of respondents’ views, and describes the progress Government are making to deliver a strong, financially sustainable and high quality HE sector; promote a better student experience; foster social mobility and widen participation; and create a more responsive higher education sector in which funding follows the decisions of learners and successful institutions are freed to thrive. The response includes an announcement that we will reduce the “numbers” criterion for university title from 4,000 higher education students to 1,000. This will widen access to university title for smaller, high quality providers, and is expected principally to benefit many of the long-established colleges represented by GuildHE.
The White Paper set out proposals for primary legislation to create a new regulatory framework. Many responses to the White Paper stressed that we do not yet know the full effect of the new funding arrangements, which will come into effect for academic year 2012-13. Hence, it cannot be clear what form of regulatory framework will be appropriate. We will therefore not at this stage be introducing changes to primary legislation, but will move our reform agenda forward primarily through non-legislative means.
The Government response also announces that we will arrange for alternative providers, and those FE colleges that do not receive HEFCE funding, to be treated alongside other providers of higher education in being covered by limits on their numbers of publicly-funded students. We will consult later this year on the process for applying these changes. We will also review how existing quality assurance arrangement affect alternative providers, including FE colleges offering HE. We strongly support both existing HE providers and the entry of alternative providers and FE colleges into the HE market, and these measures will create a more level playing field.
Post-EU Competitiveness Council
The EU Competitiveness Council took place in Brussels on 30 and 31 May 2012. I represented the UK on research issues on 31 May, and the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for North Norfolk (Norman Lamb) who is responsible for employment relations, consumer and postal affairs, represented the UK on the internal market and industry issues on 30 May. A summary of those discussions follows.
The main internal market and industry issues discussed on 30 May were: the competitiveness of enterprises and small and medium-sized enterprises (COSME) programme, mutual recognition of professional qualifications (MRPQ), digital single market and governance of the single market, the public procurement directive, online and alternative dispute resolution, and the unified patent court.
A partial general approach was agreed on the COSME proposals. Agreement covered everything except the budget figures, which will be inserted when the overall 2014-20 EU budget is agreed. The UK argued against the suggestion to remove provisions in article 19(2), which is a key provision to strengthen governance arrangements, and also argued against strengthening the tourism provisions.
An orientation debate was held on MRPQ. The UK intervened to call for more transparency and mutual evaluation of regulated professions to be carried out sooner rather than later, and to note a concern about any move to six years and 5,500 hours’, training for doctors. We were supported by several member states on the transparency point, and the Commission agreed to carry out a pilot transparency exercise.
Over lunch, there was a discussion on Single Market Act I and Single Market Act II. The presidency focused discussions on two questions regarding the challenges facing Europe relating to growth, and what actions should be included in the new Single Market Act. The UK intervened to state that we needed to create the right conditions for private sector growth by, for example, putting into place a proportionate and enabling regulatory framework, inspiring confidence in businesses and consumers to invest and spend, and by removing the low level barriers and frustrations that take time and energy to overcome.
On priorities for the forthcoming Single Market Act II, we stated the need to fully implement the services directive, see a programme of single market governance enforcement measures, the need for prioritisation of the digital single market and for an ambitious package of better regulation measures.
The Council agreed conclusions on the digital single market and governance of the single market without discussion.
A second orientation debate focused on two aspects of the public procurement dossier—e-procurement and governance. The presidency opened the debate by outlining its proposal to remove the governance structures from the proposals (focusing on tasks to be carried out by member states instead) and recalling the need to be ambitious and move to e-procurement by 2016. On e-procurement the UK, along with nine other member states, argued for a more gradual transition, noting that there are still some technological issues to overcome. Other member states called for a shorter deadline, whereas others supported the 2016 deadline. The presidency concluded that given the variation in views a 2016 deadline may appear to be appropriate. On governance, most member states supported the presidency approach, and we specifically noted our opposition to the reciprocity instrument.
Ministers agreed a general approach on online and alternative dispute resolution (ODR and ADR). The presidency had tabled an amendment that excluded Government-funded further and higher education from the scope of the directive, which was an important UK objective. The UK intervened to support the text, and to explain why the exclusion was needed and why it would not affect other member states.
The final substantive point concerned the unified patent court, which was scheduled for political agreement. No new proposals or amendments regarding the draft agreement were put forward in advance of the Competitiveness Council and, while there was a brief discussion on the location of the central court with the UK setting out the case for London, there was no change in member state positions, nor was there any discussion on substantive policy issues. We expect this issue to be discussed again at the European Council in June.
There were three AOB points on internal market and industry. The first concerned state aid modernisation. The Commission set out its aims for reform of the state aid regime over the next 18 months. Debate was not anticipated, but several member states intervened to support the thrust of the initiative. The UK intervened to emphasise the need to protect the single market and focusing efforts on limiting distortive aid.
The other AOB points covered the work programme of the forthcoming Cypriot presidency, and an intervention from the Lithuanian delegation regarding the like-minded paper on the single market.
The main research and space items discussed on 31 May were: proposals for a regulation establishing Horizon 2020; progress reports on the proposed regulation laying down the rules for participation and dissemination in Horizon 2020, the Council decision establishing the specific programme implementing Horizon 2020 and the Council regulation on the research and training programme of the European Atomic Energy Community complementing Horizon 2020; progress reports on the proposed decision on the strategic innovation agenda for the European Institute of Innovation and Technology and amending regulation establishing the European Institute of Innovation and Technology; and adoption of Council conclusions on European innovation partnerships.
Council agreed a partial general approach on the Horizon 2020 core regulation. Agreement did not cover the budget figures, which will be inserted when the overall 2014-20 EU budget is agreed. I intervened to support retention of excellence as the primary funding criterion, the provisions in relation to funding of embryonic stem cell research and maintaining an appropriate balance between funding different sizes of project. I urged the Commission to bring the International Thermonuclear Experimental Reactor (ITER) back within the multi-annual financial framework. I argued for participants to have the option of being funded on the basis of actual indirect costs.
Ministers took note of presidency progress reports on the remaining Horizon 2020 legislation (the regulation laying down the rules for participation, the decision establishing the specific programme for implementing Horizon 2020, the regulation on the research and training programme of Euratom and the decision and regulation relating to the European Institute of Innovation and Technology (EIT)).
The Council endorsed conclusions on European innovation partnerships (EIPs) restating the importance of engaging member states in the process at an early stage and ensuring that EIP steering boards included balanced representation.
Under the AOB items, the Cypriot Minister set out his plans to make further progress on the Horizon 2020 legislative package during their presidency.
The Council also received an update from the Commission on the development of the innovation headline indicator, and a report on the work of the Strategic Forum for International Science and Technology Co-operation (SFIC) in 2011-12.
During lunch Ministers discussed the results achieved by the EIT since its establishment in 2008, and mechanisms for improving the links between higher education, research and innovation (the so-called “knowledge triangle”). I intervened in support of delegations calling for a more realistic budget than proposed by the Commission in view of the fact that the EIT was still a relatively unproven instrument.
Departmental Business Plans
On 31 May the Government published an updated set of departmental business plans.
Each Department’s business plan sets out:
its departmental priorities;
the actions it will undertake to fulfil its priorities and when it will take these actions;
Its expenditure for each year of the spending review; and
the indicators and other data it will publish on the cost and impact of the public services for which it is responsible.
The form and structure of the business plans has been improved from the previous versions in the following ways:
a new annex has been added showing each Department’s contributions to cross-cutting agendas including growth, social mobility, sustainable development, efficiency, open public services, the red tape challenge and the civil society compact;
the structural reform plan sections are more focused on actions that contribute to the Government’s reform agenda; activity representing “business as usual” has been moved to an annex; and
the information strategy section has been replaced by a summary of each Department’s open data strategy, which will be published in full later this summer.
We are also improving the way that progress against the plans is reported. We have updated the business plans website, available at: http://transparency.number10. gov.uk/, so that it is clearer, more informative and easier to use. The information will also be published in open formats, so that users will be able to analyse the data more easily.
A full list of the changes to each of the departmental structural reform plans and input and impact indicators contained in the business plans can be found at:
Bilateral Loan to Ireland (Revised Interest Rate)
I would like to update Parliament on the loan to Ireland.
Parliament will be aware that in July 2011 the Chancellor committed in principle to lower the interest rate on the bilateral loan to Ireland.
Following the agreement last year, the Treasury have now in principle agreed the new, lower interest rate on the bilateral loan to Ireland. The new rate will represent the UK’s cost of funds plus a small service fee of 0.18%. The UK’s cost of funding is defined as the average yield on gilt issuance in the six months prior to the disbursement of a tranche. This is subject to the loan agreement being revised to reflect the new rate.
I will update Parliament once the revised loan agreement has been finalised and signed.
HM Treasury has provided a further report to Parliament in relation to Irish loans as required under the Loans to Ireland Act 2010 alongside this statement.
Communities and Local Government
Departmental Business (Whitsun Recess)
I would like to update hon. Members on the main items of business undertaken by my Department since the House rose on 24 May 2012.
Diamond Jubilee Celebrations
2012 is a year of celebration and it was heartening to see how communities across the country came together to celebrate Her Majesty the Queen’s diamond jubilee. Across the country thousands of street parties were held and I praise local councils for showing the spirit of celebration and taking a flexible approach to local residents’ party plans.
On 29 May, I endorsed and attended the launch of the Jubilee Hour campaign. Jubilee Hour calls on people across the UK to donate 60 minutes of their time to help their local community, to honour the Queen’s 60 years of service.
Supporting the High Street
We are determined to see the nation’s high streets thrive and enable them to fulfil their potential as economic hubs that will help drive growth across the country.
On 26 May, my Department announced the first 12 Portas pilot towns. The pilots will receive a share of £1.2 million; a dedicated contact point in Government to provide advice and support to help identify and overcome challenges to local business growth; have access to free support from retail industry leaders and opportunities to meet and discuss with fellow pilots to enable them to secure the future of their town centres.
Over 370 applications to become Portas pilots were submitted from across the country and in response to clear appetite my Department has opened up a second round competition for a further 15 Portas pilots. Each will receive the same funding as round one winners. The deadline for applications is 30 June.
In addition to supporting our high streets my Department wants to help ensure that local shopping parades, crucial to local neighbourhood economies, are not left lagging behind from lack of investment, antisocial behaviour and competition from online shopping and mega-store discounts. On 6 June, my Department published a new guide that builds on the Portas support, giving hands-on practical advice and insights on how to restore local shops into vibrant business areas, highlighting the range of Government support on offer to enable them to succeed.
Helping families with their council tax bills
This Government are determined to ensure that local residents get a fair deal on council tax that helps them with their cost of living.
On 28 May, my Department confirmed plans to amend some technical council tax rules to give elected local councils greater flexibility to help residents through fairer approaches to billing, second homes, empty homes and solar panels. These reforms could allow councils to make up to a £20 reduction in the bill for a typical band D property in England, or hold bills down by the same amount.
These reforms will give local residents a new legal right to choose to pay their council tax bills in 12 monthly payments rather than 10 months; support the take-up of voluntary electronic billing; give councils greater local flexibility to choose to waive special tax relief on second homes and empty homes and allow councils to use the monies to keep the overall rate of council tax down. Reforms will allow councils to tackle long-term empty homes through an empty homes premium. Reforms will also prevent a “sun tax” supplement on bills for homes with solar panels or the need for intrusive inspections where panels are installed by a third party under the “rent a roof” scheme.
The Government’s response to the technical consultation paper on council tax also outlined our plans to consider the issue of family annexes. My Department is keen to remove more of the tax and regulatory obstacles to families having a live-in annex for immediate relatives—such as those for teenagers or their elderly grandparents—more commonly known as “granny flats”. While self-contained annexes occupied by those over 65 benefit from a council tax exemption, no form of relief is available for those under that age, and some families unreasonably face two separate council tax bills for one effective property.
We will be undertaking further work through a broader review of how annexes for family homes can be supported with the aim of augmenting housing supply and supporting extended families.
Getting empty homes back into use
While the levels of long-term empty homes are at the lowest levels since 2004, tackling the 720,000 empty properties and bringing thousands of homes back into use is a top priority.
On 29 May, my Department announced the 20 successful bids from local authorities that will receive a share of the £60 million clusters of empty homes fund. Empty homes can often attract antisocial behaviour and associated crimes such as vandalism and fly-tipping. By returning empty homes back into use we can provide families with much needed homes, kickstart local training and employment opportunities and help to improve local communities.
In addition voluntary and community groups across the country will receive over £25 million to tackle individual empty properties in their area, to ensure that another 5,600 empty homes are occupied once again. In total, the coalition Government are providing £155 million of central funding, rising to £215 million including matched funding, to bring empty properties back into productive use.
Supporting the Community Right to Build
We are giving communities the power to decide on future development in their local area and putting planning permission powers firmly back into the hands of local people.
Under the new community right to build, communities will be able to approve new local developments without the need to go through the normal planning application process, as long as the proposals meet certain criteria and there is the backing of more than 50% of voters in a local referendum. On 29 May, my Department made £17 million available to support communities to deliver building and development projects that the local area needs.
In addition my Department has pledged a £2,000 “early bird bonus” to those communities that move quickly and submit their plans in by the end of March next year.
To support communities, the charity locality is providing expert advice and detailed one-to-one mentoring for those looking to exercise their right to build.
Tackling waiting lists and improving standards
Tackling social housing waiting lists and getting families and vulnerable people into homes is a top priority.
The Localism Act 2011 will give local authorities the flexibility to end the main homelessness duty by arranging and offer of suitable accommodation in the private rented sector, without requiring the applicant’s consent. These changes to the homelessness legislation will give local authorities freedom to make better use of good-quality private rented sector accommodation. They are part of reforms to social housing to ensure that the system is fair; that good, affordable housing is available for those who genuinely need it; and that we get the best from our 4 million social rented homes.
On 31 May, my Department published new safeguards to protect families housed in the private rented sector and ensure that safety standards and assurances are in place. This will provide extra legislative protection by preventing local authorities from using poor quality private rented accommodation for households owed the main homelessness duty. The consultation also sets out how homeless families should face the least possible disruption when being offered new accommodation and avoid the upheaval of long-distance moves.
Protecting homeowners from cowboy builders
People take pride in their homes, investing in their improvement and repair yet around 85,000 complaints are made about building work in homes each year according to the Office of Fair Trading.
On 6 June, my Department strengthened the requirements under competent persons schemes that allow traders to self-check their own work. Organisations that run competent persons schemes now need to be accredited to an international quality standard in order to operate; have to assess that their members’ competence levels and actual work are up to national standards; and be required to promote the membership and use of their schemes.
Theses measures also ensure that householders have a financial safety net in place such as a guarantee or insurance, to catch them if self-check installers fail to finish work properly or if they cannot be chased through the courts.
Copies of the accompanying press notices and associated documents have been placed in the Library of the House.
Energy and Climate Change
Renewable Heat Incentive
The renewable heat incentive (RHI) is the first of its kind in the world and provides long-term support for renewable heat technologies such as heat pumps, biomass boilers and solar thermal panels.
On 26 March 2012, I reaffirmed the Government’s commitment to growing the UK market for renewable heat technologies by announcing further support for the domestic sector under a second phase of the renewable heat premium payment scheme (RHPP). At the same time I set out our delivery timetable for providing longer-term support for households, expanding the non-domestic scheme and transparent plans for staying within our budget for this year.
I am pleased to report that we are on track to meet the RHI delivery timetable and have met our first milestone.
In March we consulted on a mechanism for more effectively managing the RHI budget in the short term. Today, I am pleased to publish our response which will ensure we have a stand-by budget management mechanism in place this summer, enabling the sustainability of the scheme by allowing us to keep within the budgetary limits set by the comprehensive spending review (CSR). Further, I can confirm that we are on track to consult on longer-term proposals in July 2012 as planned.
To ensure the supply chain can be maintained with the available funds in this spending review period, we have set an upper limit of £70 million for 2012-13. However, it is important to note that the funding amounts announced in the spending review for 2013-14 and 2014-15 are unchanged.
The upper limit of £70 million ensures that the 2013-14 budget of £251 million would be enough to pay for existing installations and new installations, were the 2012-13 limit to be reached. A higher limit for 2012-13 would leave insufficient funds available in the following year for new installations and therefore could be very damaging to the renewable heat industry.
In the event of having to use the stand-by mechanism, a notice period of one week would allow for a much higher trigger point for suspension of the scheme (£67.9 million, 97% of the £70 million limit) compared with one months’ notice (£56 million, 80% of the £70 million limit) and would also reduce the chances of scheme suspension being triggered unnecessarily.
We recognise the need to provide comprehensive information on current and forecast scheme expenditure and to make it publically available. To do this we will provide a weekly information update on our website, tracking our committed expenditure. If required we will also provide an estimated date of suspension prior to the formal notice period, in the event of an unexpected surge in uptake such that suspension is likely to be triggered.
I would like to thank all those people who helped us develop these plans. I can confirm that after careful consideration, should we need to use the stand-by mechanism, this will be done when the spend in 2012-13 is forecast to reach £67.9 million with a formal notification period of one week. Given current uptake figures, we do not currently envisage having to use this mechanism. However, we have learnt from our previous experiences and want to provide assurances to the market and the public that we are spending money on the RHI in a sustainable way.
Government remain committed to the deployment of renewable heat and as such we are continuously looking at innovative ways of supporting it across all sectors.
Green Deal and Energy Company Obligation
Today my Department is publishing the Government response to the green deal and ECO consultation ahead of the introduction of the green deal this autumn.
Having considered over 600 written responses from a variety of organisations and individuals, I would like to thank all those who submitted a formal response or participated through the various activities held during the consultation. Feedback from the consultation directed our focus towards four key policy areas: strengthening consumer protection, reducing industry burdens, improving behind-the-scenes operations and revising ECO. I have acted on these areas, and full details of the final policy are set out in the Government response.
Following consultation, this week I am laying before Parliament the key statutory instruments which establish the market framework of the green deal and ECO, subject to the affirmative procedure. I am laying these instruments alongside the final impact assessment, which evaluates the net present value of the policies. My Department has simultaneously published associated research, which informed our final conclusions. Later in June, I will lay before Parliament a second tranche of more minor green deal statutory instruments subject to the negative procedure. I will also be bringing forward the green deal code of practice and modifications to energy licences and codes.
Having taken over this programme four months ago, I have spent this time talking to stakeholders and understanding how to ensure successful delivery. Mindful that we are creating the foundations for a market that will run through to 2030, and in light of representations I have received, the regulations I am laying today provide for a carefully managed introduction of the green deal starting this autumn.
Subject to parliamentary approval of the green deal legislation, accredited certification bodies will be able to submit applications to register with the green deal registration and oversight body from August. The certification bodies will then be able to register those assessors and installers they have certified. Similarly, potential green deal providers will be able to apply for their approval. This will allow participants time to seek formal authorisation ahead of the introduction of the green deal framework in the autumn. It is important that the market will be able to test systems properly during the first weeks following the introduction of the green deal framework and ahead of the first fully completed green deal plans in early 2013. In the meantime, the energy company obligation (ECO) legislation I have put before Parliament today will ensure that a new ECO is established from October this year. This will mean that an estimated £1.3 billion-worth per year of energy efficiency and heating measures can be delivered across Great Britain. This will be directed to vulnerable and lower-income households, and carbon saving measures. The Government remain absolutely committed to tackling fuel poverty.
An important aspect of preparations is training the work force, and I took an obligation in the Energy Act 2011 to report to Parliament on what steps I have taken to encourage green deal installation apprenticeships. On 8 March 2012, in co-operation with asset skills and construction skills, I announced £3.5 million to train up to 1,000 green deal insulation installers, and 1,000 green deal assessors to our new national occupational standard for green deal assessment. This training will also include the validation of existing installer training courses to meet the new green deal PAS 2030 requirements and the training of trainers to ensure quality training courses are available. I welcome the wide support from industry for this initiative and the huge level of interest reported by the sector skills councils. We believe the green deal has the potential to support up to 60,000 jobs in the insulation sector alone, more than doubling the number of jobs in the sector, and making a real contribution to green growth.
We will work with the insulation sector to explore the value of a second tranche of funding for training later in the year to help those moving from the carbon emissions reduction target (CERT) and the community energy saving programme (CESP) and into related green deal installations. In addition to this, my Department will continue to work with employers and the sector skills councils to ensure that the Government’s wider apprenticeship frameworks support not only the green deal, but also green and sustainable construction more generally.
We have created a robust legal framework, which enables a market in energy efficiency to flourish. We are committed to ensuring that the interests of green deal providers and financiers remain protected to maintain the security of green deal asset and thus secure the lowest possible cost finance for consumers.
It is only sensible to keep regulations under review and, for the sake of transparency, I will commit now to review these regulations, in consultation with appropriate stakeholders, before 31 January 2018 and to publish the conclusions in a report. The report will set out the objectives of these regulations and assess the extent to which they were achieved, whether they remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.
I will later today be making an oral statement to the House on family migration.
Work and Pensions
Workplace Pension Reform
Later today the Government will publish a response to the consultation document “Automatic Enrolment and European Employers”.
The Pensions Act 2008 introduces a duty on employers to automatically enrol jobholders into a workplace pension scheme. A jobholder is defined in the Act to include an individual,
“who is working or ordinarily works in Great Britain under the worker’s contract”.
A minority of workers may be “qualifying persons”—that is individuals employed under a contract of service and whose place of work under that contract is sufficiently located in another European economic area state so that their relationship with their employer is subject to the social and labour law relevant to the field of occupational pension schemes of that EEA state.
It is possible that a small number of individuals will have “dual-status”—being both a qualifying person and a jobholder simultaneously. This overlap means that there is a potential conflict between the employers’ duties to automatically enrol eligible jobholders and pension providers being able to offer a suitable product for this purpose.
It is my intention to lay regulations exempting European employers from automatically enrolling “dual-status” workers and ensure that employers are able to comply with the employers’ duties required by the Pensions Act 2008.
I would like to thank all those people and organisations who have offered their views and advice in response to the consultation. A copy of the Government’s response and the associated impact assessment will be placed in the Libraries of both Houses and will be available later today on the Department’s website: http://www.dwp.gov.uk/ consultations/2012/.